The NHS proves there’s always been an alternative

As Britain’s National Health Service celebrates 70 years today, its troubles expose neoliberalism’s lies.

Image: Birmingham Eastside, CC 2.0

Emerging
from the ashes of the Second World War, the founding principles of the NHS –
free to all, at the point of use, beyond the insurance principle – allowed
Britain to win the peace. Universal health coverage - founded across the UK seventy years ago today - gave succour to a sick and
dispirited nation, providing the conditions in which Fordist
consumer-capitalism could mature by creating a “secret,
silent column” of healthy and productive citizens who helped
usher in the post-war Keynesian boom. For a nation bowed but unbroken,
scuttling its empire in a new age of human rights, it may have seemed
reasonable for Aneurin Bevan to proclaim that Britain, with its NHS, now had
“the moral leadership of the world”.

This
was an era of rapid and momentous change. Little less than a year before, at
the stroke of midnight, the nations of India and Pakistan achieved freedom from
a dying empire; in 1948, as 4th July
turned to 5th, the
British people could dream of freedom from fear.

Support for the NHS across the British state

The
NHS was the archetypal child of its ideological time. The concept of public
healthcare under the NHS model sat atop a new wave of political and economic
ideas. Centralised state bureaucracies and Keynesian demand management washed
away the failed political economy of the Wall Street Crash and the Great
Depression. As Bevan pushed through his plan for a publicly provided rather
than ‘publicly organised’ NHS, a former Conservative health secretary asserted that
this “would destroy so much in this country that we value”. Precisely the
opposite occurred.

However,
contrary to some contemporary opinion, this revolutionary turn in the role and
functions of government came with broad support from across the British state.
This is not to disavow the achievement, merely a reminder that the time for a
profound shift in political and economic ideas had come. When it came again, in
the late seventies and early eighties, the vanguard of the new order identified
themselves almost in direct opposition to what the NHS stood for, the ideas
that justified it, and the objective reality it delivered.

The
NHS has always been the target of opprobrium from the intellectual evangelists
of incongruous market liberalism. This is the case whether they are set to gain
from outsourcing and privatisation, or are merely captured by the shadows on
the collective cave of our economic discourse. In the case of the former, from
its inception, health insurance giants watched the NHS and pumped money
into proto-neoliberal think tanks that criticised all facets of Britain’s
public healthcare model with gleeful abandon.

proto-neoliberal think tanks that criticised all facets of Britain’s public healthcare model with gleeful abandon

It
was in reaction to an attack on the principles of non-fee-paying blood donation
that the sociologist Richard Titmuss wrote The Gift Relationship,
his seminal exploration of the impacts of pecuniary incentives in social
policy. Titmuss warned that the unabashed introduction of markets into
previously untouched areas of policy would result in a destructive, pervasive
“ideology to end all ideologies”. Into what future would we now head if it was
this book that British prime ministers pulled from their bags, slammed onto
tables, and over which they declared “this is what we believe”?

Neoliberal revolution strikes

As
the post-war consensus fell, practical men, finding themselves quite exempt
from intellectual influence, slaved away to deliver the assertions of defunct
economists. The theoretical basis of neoliberal economic ideas considers
markets the superior means of coordinating allocation of resources under
conditions of scarcity. However, when applied to healthcare, market dynamics
are profoundly inappropriate. This is not the case with, say, food, where you,
endowed with sufficient information on which apple is appropriate for your own
needs, can enjoy the benefits of a plurality of apple vendors, each optimising
their products and prices to meet market demand. For serious heart problems,
even a world-renowned cardiothoracic surgeon would suffer from incomplete
understanding of her condition and treatment, opening up information asymmetries
with the consultant sitting opposite.

It
took until the nineties for the neoliberal revolution to strike the NHS. Market
structures were the order of the day as the state sailed heroically into the
End of History. The NHS, as with all areas of public provision, was now going
to compete – by hell, high-water or penalty imposed from central government.
That it has taken until now for the contradictions, inefficiencies and failures
of marketisation to be recognised by elements of the political mainstream
stands testament to the dangerous paucity of our policy discourse. One cannot
look upon the collapse of Carillion and the eye-watering cost
of the Private Finance Initiative – £310 billion for
assets worth around £55 billion – without concluding that something is
profoundly wrong with those economic ideas that justify such cruel, inefficient
policies. Where does duty of care come in a contract that allows a private company
to charge
an NHS hospital£333 for a lightbulb?

Marketisation brings waste, moral hazard and structural risks

The
NHS under neoliberalism has failed on its own terms. Firstly, inappropriate and
unnecessary marketisation has delivered waste, moral hazard, and, ultimately,
exposed the system to structural risks, imposing large costs on the taxpayer
through the socialisation of failure. The Centre for Health and the Public
Interest estimates that the annual cost of marketisation in the NHS is in
excess of £4.5 billion per year, with additional start-up costs of over £3
billion per major market reform. Indeed, the benefits of market
‘reforms’ have always been hotly contested, with opposition across academics
and health practitioners, who stress a high opportunity cost in forgone patient
care and clinical innovation.

Secondly,
privatisation – distinct to the wasteful
outsourcing of healthcare provision to private companies – has
seen the loss of assets built up over decades and paid for by generations of
taxpayers, a particularly vindictive, socially and economically irrational
policy. For example, the coalition government famously sold 80% of the UK’s
blood plasma resource company to Bain Capital for £90 million, putting the
security of blood supplies at risk. Bain soon enjoyed
profits in excess of £700 million when the company was
subsequently sold to Chinese investors. Into the future, the government is
seeking to sell large quantities of NHS land, imposing the opportunity cost of
missed public investment in productive assets, such as the construction of much
needed hospitals and the installation of renewable energy that could power the
NHS and reduce its carbon emissions.

the loss of assets built up over decades and paid for by generations of taxpayers

Thirdly,
it has simply been a deliberate political choice to underfund the NHS over a
period that now approaches a decade. Over the 2015/16 financial year, NHS
trusts and foundation trusts fell into a combined
deficit of nearly £2.5 billion, only three years after
reporting a surplus of over £500 million. While the changing nature of ill
health and demand for services plays a part, this gap has opened up due to a deliberate
policy of underfunding: real terms increases in NHS funding were
0.9% a year between 2010-2015, in contrast to an average of 3.7% over its
lifetime. There is now a near universal consensus that the NHS is underfunded
and that the lack of resource is the greatest contributor to successive crises
– something that even the government has begun recognised. In all, health and
social care spending cuts have been linked to 120,000 excess
deaths.

At
best, the justifications for George Osborne’s ‘Age of Austerity’ were the
spurious frenzies of a politician appealing to the polluted ideas of a
discredited yesteryear to benefit wealthy vested interests. At worst, they have
cost lives and halted the inexorable, centuries-long tradition of improvement
in public health driven by the noble efforts of British academics and
clinicians. Do not forget that life expectancy had been rising continuously for
over one hundred years, a trend that has likely
faltered because of the political choice to cut public
expenditure, with the rate of increase in life expectancy having dropped by
almost 50% since austerity began. If medical science has been of the greatest
benefit to mankind, uncritical adherence to outworn economic dogma has been of
the greatest
detriment.

The human cost

For
the neoliberal experiment, as in nearly all areas of policy, has imposed a
wicked cost on our health. It has damaged systems that seemed to be working
moderately well in the past and eroded the institutional basis upon which we
can effectively respond to the challenges of the age. Take the future of the
digital technology, which could alter social and economic relations at a pace
and scale not seen since the Industrial Revolution. The manner in which digital
technology is integrated into healthcare in the UK is and will always be a
political choice. Smart phones, ubiquitous data collection and machine learning
could be harnessed by the NHS to better realise its founding principles,
creating possibilities beyond the wildest imaginings of Bevan, Beveridge et al.
Instead, the digital frontier is dominated by multinational monopolists and
speculators pumping money into consumerist start-ups that flood markets
springing up in anticipation of continued underfunding and privatisation. We
can do better.

Moreover,
the very basis of our healthcare model is being shaken by demographic change
and a shift in the nature of ill health. Underfunding is simply unsustainable
in the face of these trends. Into the future, environmental change, already
described as the greatest threat (and
opportunity) to public health, will determine the parameters of our
healthcare imaginations. There is no room for systemic waste, fragmented
private providers, and the inefficient adoption of innovative technologies in a
world that has warmed by 1.5C and in which the majority
of soil fertility has been lost.

What is to be done?

What
is to be done? Much of a post-neoliberal approach to the NHS must seek to
repair the damage done over the last few decades. Primarily, the NHS needs to
be adequately funded as part of a wider move away from the discredited policy
of austerity. Ill health over the period of fiscal retrenchment has resulted
from damage to the systems of the state, encompassing everything from transport
to social care, that provide the foundations upon which good health can spring.
It will be a tragedy if the number of lives lost during the application of
these failed, pre-Keynesian ideas should not banish them forever.

The
government’s recent pledge to up NHS spending by an average of around
3% a year to 2023/24 does not do this. It is below the 4.3%
annual growth needed to keep pace with demand and much lower
than that needed to recover from the damage wrought by the past eight years of
underfunding. What’s more, the funding is delayed until next year, opening up a
cavern across which the NHS must jump and into which much of it could fall,
particularly if another cold winter pushes the service into collapse. The
increase also leaves out public health, staff training and building and other
key capital investments. It has nothing to say about the cost of debt
repayment.

Marketisation
can no longer be the first port of call for policymakers, as should be the case
across the public sector. This includes needing to handle the growing burden of
PFI debts, with options including the centralisation and renegotiation of
contracts. Into the future, the social, environmental and economic power of the
NHS should be brought to bear, with hospitals acting as ‘anchor institutions’
that provide a local basis for everything from the rollout of clean energy
through building energy assets on NHS land, to improving employment standards
by targeting local recruitment and procurement. These developments are already
occurring, with, for example, some hospitals in London recycling
their heat into local housing. Maximising the local socioeconomic
role of the NHS could also present a more meaningfully democratised approach to
decision-making.

Until
then, be wise to what neoliberalism has done and will continue to do to the
NHS. Born of war and strife, Britain’s health service celebrates its 70th birthday in a bad way – bowed, nearly broken, ill-prepared
to suffer the burden of continued underfunding and held together by the
goodwill of staff. All the while, foreign insurance giants watch with patient
eyes for opportunities arising from Brexit trade deals. The NHS is about being
civilised; as we dismantle it, we become less civilised.

The NHS is about being civilised; as we dismantle it, we become less civilised.

Over
the course of the 70th anniversary,
the official celebrations shall likely focus on NHS staff. Quite right. But do
not forget that the NHS is and has always been about economics, politics and
power. It is about multinational corporations getting richer while sick people
die in corridors. It is about bright young management consultants repeating
failed economic cantations to justify inefficiency. Alone in a society
brutalised by years of austerity, the NHS is increasingly the first and last
line of care for people up and down the country, and is kept going by the
blood, sweat and tears of its staff.

The
NHS is no longer national. Fragmented and sucked dry of resources, it cannot
invest in responding to modern health problems. The NHS is increasingly
becoming a logo under which private enterprise may suckle on the teat of the
state, growing fat off our taxes. The predicament of the NHS at 70 is the
result of a concerted application of failed economic ideology. Neoliberalism’s
legacy is the private ambulance provider who bungles an emergency call because
their staff are under-trained and poorly equipped; it is the baby who dies in
the night, away from their parents, as the private provider of an out-of-hours
service fails to adequately respond. Stand this no longer. If the Labour Party
are to enter government in the near future, a test of their willingness to
deliver a new society will be whether they create a post-neoliberal NHS.

The
NHS can be all that its staff and its patients believe it to be. A harbour in
which fear is kept at bay, in which everyone maintains the right to be relieved
of the pressures of ill health. In the final analysis, the crisis of
neoliberalism is inherently a political crisis founded on the inadequacy of a
certain set of economic ideas. In the same way that the NHS has always proven
there is an alternative, the orthodox approach to healthcare policy proves that
we need, now more than ever, an alternative to neoliberalism.

Laurie Laybourn-Langton is a senior research fellow at IPPR, and founder of Bring Back the NHS.

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